Oil exploration takes big leap

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Oil exploration in the Bay took a giant leap forward yesterday as government, business and councils met to "put down in one place" the benefits and pitfalls of an oil and gas industry.

Economic Development Minister Steven Joyce met representatives of the eight East Coast councils in Hastings before announcing the East Coast Oil and Gas Development Study to explore the potential of oil and gas finds.

"It is an opportunity to look at the potential for the economy, potential jobs in the economy and the scope of the opportunities that may exist," he said. Business Hawke's Bay, an arm of the Hawke's Bay Chamber of Commerce, was commissioning the study with the Government. Councils were contributing $30,000 and government about $100,000 towards the study, Mr Joyce said. "We will look to have it completed and published before the end of the year, to have informed public debate around those economic opportunities.

"It is literally a case of let's have a look at it, let's have a look at the opportunities, let's scope the limitations to those opportunities and let's present the potential."

A government report released last month said an oil and gas development similar to Taranaki's could be worth $1.5 billion annually in exports and create 5500 jobs.

Stratford-based Canadian oil company TAG Oil is currently in a $100 million joint venture with industry giant Apache to develop TAG's extensive East Coast oil exploration permits.

Apache is poised to drill in the Tararua District and has said it had a 20 per cent chance of finding oil in commercial quantities in Hawke's Bay, a figure industry commentators say is double the industry average.

TAG reports improving results in Taranaki, ending the first quarter of the 2012 financial year with $103 million of cash and no debt, following over a decade of investment. The last 18 wells drilled proved successful.

Energy and Resources Minister Phil Heatley said study inputs would be sought from a range of parties, including industry and local iwi. "We know how successful oil and gas has been for Taranaki, with higher regional wages and low unemployment," he said.

"The oil and gas industry in Taranaki underpins a thriving community by providing thousands of jobs and contributes billions to the New Zealand economy.

"This joint report will give us a steer on what the potential is for the East Coast. I will personally be visiting the region in the near future to discuss opportunities with community and iwi leaders."

Mr Joyce said his and Mr Heatley's visits were not to persuade but "to be available for the discussion".

Business Hawke's Bay CEO Murray Douglas, in his last day in office, said the study would attempt to put down in one place the environmental issues and economic potential.

The oil and gas industry had been irresponsible in some parts of the world, but "a lot of misinformation had been spread in Hawke's Bay", he said. "For example, there was never ever a licence to drill on the Heretaunga Plains. People were getting very upset about it, and correctly so, even though it wasn't true."

Whether oil and gas development should happen was another issue.

"Let's just see what could happen."

He said it was "coincidentally correct" that the Government had instigated the East Coast report at the same time it was passing the Crown Minerals (Permitting and Crown Land) Bill. The bill amends the Crown Minerals Act 1991 and seeks to simplify petroleum and mineral permits.

- Hawkes Bay Today

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